Council questions tax break request for former Ryan's Buffet building

Owner of former Ryan’s Buffet building explores sales tax abatement

STERLING – Most City Council members on Monday expressed skepticism about a request to give a tax break to a planned restaurant.

In February, local car dealer Pete Harkness bought the former Ryan’s Buffet building on East Lincolnway. At a meeting Monday, council members were asked how they felt about sales tax abatement for the property.

The city has given sales tax abatement to retailers such as Kohl’s and Walmart, but never to a restaurant. Such deals usually return to a business some of the sales tax revenue generated from its transactions in return for the business developing the property.

City Council member Barry Cox said he was “totally opposed” to giving sales tax abatement, especially when he had no details on the plans for the property.

“We keep giving tax away,” he said. “There’s no one who needs it more than we do ... We always have streets that need to be worked on.”

He said he opposed giving the break to Walmart a few years ago. Walmart, he said, threatened to go elsewhere, but he believed it was an empty threat.

“We were the hub. They needed to be here,” he said, adding that Walmart later opened a store in Dixon as well.

Member Lou Sotelo said the Kohl’s project was successful, but sales tax abatement decisions are always tough. He said the council needed the substance behind the proposal for the Ryan’s building.

Member Joe Martin said the developer approached the city with the request after buying the property, putting the “cart before the horse.”

“There’s been some development agreements with this person before,” he said. “There was an expectation that we would do something again.”

Martin also said the city may be “opening a can of worms” if it granted the request. Other restaurants, he said, would seek a similar break.

John Stauter, elected to the council last month, said he, too, had a problem with opening that door.

Another new member, Chris Schuchard, said he didn’t know the reputation of the owner or how many full-time workers that the restaurant would have or whether they would have health benefits.

While not stating a position, member Retha Elston said she hated to see buildings sit empty for a long time.

Mayor Skip Lee seemed open to the idea of providing abatement. He said getting only part of the sales tax revenue due to the city was better than getting no revenue at all.

“Every one of these empty buildings is a blight,” he said.

Cox, though, questioned the impact on other restaurants.

“There is only so much pie to eat,” he said.

He said he would possibly be open to a break for a brand-name restaurant.

Martin noted that Buffalo Wild Wings and Applebee’s opened on East Lincolnway without getting sales tax abatement.

City Manager Scott Shumard asked for advice from the City Council on how to proceed. Members said he should seek more information.

In February, Harkness bought the building. He said he did it as an investment and that he hoped to rent it out to a business that would employ people and bring sales tax revenue to the community.

During the debate, council members didn’t mention Harkness’ name. Lee said afterward that the council wanted a philosophical discussion on a policy for sales tax abatement.